India’s Real Estate Sector Hits 7-Year High with Rs 23,080 Crore Fund Raise in FY25

Record-Breaking Year for Real Estate Capital Mobilisation

India’s real estate sector has achieved a major financial milestone in FY25, with Rs 23,080 crore raised through 12 deals, marking the highest capital mobilisation in the last seven years, according to Equirus Capital. This surge reflects growing investor confidence in India’s property market, driven by the maturity of Real Estate Investment Trusts (REITs), structural reforms, and emerging asset classes like retail malls.

Since FY18, total capital raised by the sector has reached Rs 72,331 crore, showcasing the long-term strength and resilience of the market despite economic fluctuations.

REITs Lead the Fund Mobilisation Trend

Equirus Capital’s data shows the breakdown of total fund mobilisation since FY18 as follows:

• REITs: Rs 31,241 crore

• Large-cap realty firms: Rs 20,437 crore

• Mid-cap players: Rs 12,496 crore

• Small-cap companies: Rs 8,156 crore

While REITs have mobilised the largest share of capital, small-cap real estate stocks have been the best performers since March 2021, followed by mid-cap players. Large-cap realty stocks, in contrast, have underperformed their smaller peers, while REITs have been the lowest-performing equity instrument in terms of short-term returns.

REITs Deliver Strong 12-Month Returns

From a 12-month perspective, REITs have emerged as the best-performing real estate asset class, delivering 21.3% returns. In comparison:

• Large-cap stocks: Negative returns

• Mid-cap stocks: Negative returns

• Small-cap stocks: Negative returns

This indicates that despite short-term volatility, REITs remain a stable and attractive option for institutional and retail investors alike.

Retail REITs Poised to Drive the Next Wave of Growth

In October, Anarock Group reported a significant shift in the REIT landscape. While India’s REIT ecosystem is currently dominated by commercial office assets, the next wave of growth is expected from retail malls and other asset categories.

This change is being driven by:

• Consolidation of high-quality retail assets

• Steady consumer spending

• Rising urban incomes and expanding middle-class aspirations

Anarock Research projects that the Indian retail REIT market could grow to Rs 60,000–80,000 crore by 2030, representing 30–40% of India’s overall REIT market, which is projected to reach $25 billion (about Rs 2 lakh crore) by the same year.

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Office REITs Remain the Dominant Force

According to Colliers’ report “REITs Unlocked: Accelerating India’s Real Estate Maturity”, India’s four listed office REITs currently encompass 133 million sq ft of Grade-A office space.

Additionally, about 371 million sq ft of Grade-A stock—nearly 46% of the existing inventory—is eligible for future REIT listings. This reflects a massive pipeline that could further deepen India’s capital markets and attract foreign investment.

Major REIT Deals and Fundraising Activity

Embassy Developments’ Rs 1,160 Crore Infusion

Last week, Embassy Developments completed a Rs 1,160 crore fund infusion by converting warrants into equity shares at Rs 111.51 per share. This move aims to strengthen its balance sheet and provide liquidity for future expansion.

Blackstone & Sattva Group’s Rs 6,200 Crore IPO

In another major development, Blackstone and Sattva Group have filed for an IPO of their joint venture Knowledge Realty Trust, seeking to raise up to Rs 6,200 crore (around $712 million). This is expected to be the largest REIT offering in India to date, underlining the sector’s strong institutional backing.

Investor Takeaways: Why This Matters

1. Increased Liquidity: Higher capital mobilisation signals growing investor appetite and market maturity.

2. REIT Growth Story: REITs offer stable returns and are becoming a preferred vehicle for both institutional and retail investors.

3. Retail Expansion: Retail REITs are emerging as the next big growth story, with strong income and consumption trends.

4. Global Capital Attraction: Major REIT listings and IPOs will draw foreign investment, strengthening India’s position in the global property market.

5. Robust Pipeline: With 371 million sq ft eligible for listing, the future looks promising for diversified real estate investment.

A Transformative Phase for Indian Real Estate

The record Rs 23,080 crore raised in FY25 underscores a turning point for India’s real estate sector. With REITs gaining traction, retail assets entering the mainstream, and large-scale IPOs on the horizon, the industry is entering a new era of structured, transparent, and high-value growth.

For investors, developers, and institutional funds, this represents a window of opportunity to participate in India’s evolving property investment landscape.

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